March Newsletter- False Start, Pandemic

Normally, I would have a lovely picture of spring full of discussions of the spring market activity but, as we all know, there is nothing normal going on in our lives right now. We now use the new term “social distancing”, kids are distant learners from home, churches are learning to stream their services online, families are using Zoom or Google Hangouts to connect and many have been laid off as their employers have been forced to close.

When Italy began to have major struggles all of the world leaders began to realize the seriousness of this particular virus. The COVID-19 virus as it is now identified as. The long incubation time of this virus has made it much harder to manage because many are spreading it unknowingly. We are all now trying to do our part to “flatten the curve” to lessen the strain on our medical resources as we limit our distance from others.

This world pandemic has been unprecedented. Many who study real estate markets have been trying to compare the impacts of this pandemic to previous events but there is nothing to compare to this sudden cessation of the economy.

False Start

Our real estate markets had taken off in January and they were continuing that pace through February. The charts provided in this market update are from February as we don’t have all of the numbers in for March. Everything was going great until everything came to an abrupt halt with the sudden need to try to stop the spread of COVID-19.

Have you ever been to a track meet and a running event had a false start? If you recall our newsletter last month, it showed runners bounding out of the starting blocks. With a false start, runners burst out of the blocks at the sound of the starting gun only to come to a quick stop once the gun sounds again signaling a false start. Someone started too early so the race has to restart. This is how I visualize the housing markets in North Texas. The markets were off to a great running start, only to be halted with all momentum ended.

So as we take a look at this market update, we know that all of this was before any impact of the global pandemic was evident.

We will be watching the direct impacts of the Covid19 crisis on our markets so look for that in next month’s newsletter. Let’s now look back to “Pre-Covid19” markets in February for Denton, Collin, Dallas and Tarrant counties. Out of the starting blocks and going strong, we saw prices up, supplies down and volume up.

Median Sales Price Trends

The median sale price trends in all 4 counties are up YoY. See the percentages below. The stats from last month – Denton is down 0.95%; Collin is up 1.66%; Dallas is up 2.5% and Tarrant is up 0.83% from January.

FEBRUARY 2020
Denton County
$310,000 | +1.9%

Collin County
$337,820 | +4.0%

Dallas County
$246,000 | +4.7%

Tarrant County
$242,000 | +5.2%

Volume

The number of sales is up in all four counties with the exception of Tarrrant County which is down a slight 2.2%

FEBRUARY 2020
Denton County
1,084 | +16.7%

Collin County
1,150 | +11.3%

Dallas County
1,756 | +7.9%

Tarrant County
1,833 | -2.2%

Months Supply of Inventory

All four counties have a decrease in supply as the demand for housing at the first of the year has been strong.  All three counties have less than 3 months of supply. 

FEBRUARY 2020
Denton County
2.2 | -24.1%

Collin County
2.4 | -25.0%

Dallas County
2.5 | -16.7%

Tarrant County
1.8 | -14.3%

Days on the Market

The number of days on the market decreased in both the northern suburb counties of Denton and Collin.  The number of days on the market increased for the more urban counties of Dallas and Tarrant YoY, however the number of days on the market is less than Denton and Collin counties. 

FEBRUARY 2020
Denton County
42 | -4.5%

Collin County
46 | -14.8%

Dallas County
32 | +33.3%

Tarrant County
26 | +8.3%

Appraising During the COVID-19 Outbreak

Fannie Mae, Freddie Mac, and the FDIC have provided guidelines and some temporary exceptions to appraisal requirements. In some instances, an exterior inspection can be made rather than a full inspection and in some cases, a desktop appraisal may be suitable. This is a decision that can be made by the lending institution and perhaps with a discussion with the appraiser. Here are links to the recently published guidelines:

Fannie Mae’s Temporary Guidelines

Freddie Mac’s Temporary Guidelines

FDIC FAQs During COVID-19 (Answer #12 & #13 relate to Appraisals)

In most states and counties real estate appraisals for financial institutions fall into the category of “Essential Businesses”. There is some discrepancy in Dallas County vs the city of Dallas as to whether appraisers are considered an Essential Business. We are searching for further clarification on this but in the meantime, we continue to provide services to our clients in a safe manner while following regulations in the counties and cities we service.

Please know that we have been taking precautions during this time to keep ourselves and others safe. If someone in your house is sick please inform the appraiser prior to the inspection. Please turn on all lights, open all doors and gates. Secure your pets. This eliminates the need for us to touch anything. Here is a link to a helpful article on helping an appraiser during an inspection as it relates to COVID-19.

What Homeowners Can Do to Assist The Appraiser During the Coronavirus Pandemic– Birmingham Appraisal Blog

We can all work together during this time to stay safe. We will continue to stay abreast of appraisal guidelines and local, county and state guidelines. As we watch the markets, we will be paying particular interest to listings and pendings as they can give us a little bit of a peek into the future.

As my grandmother often tells me, “this too shall pass”. I believe her. She lived through World War II and the Great Depression. She has been a steady rock in the lives of our family. Now she is in a nursing facility in quarantine, as she is at risk at the age of 91. I miss being able to see her. We pray that this will pass sooner than later and that we all come out stronger on the other side of this. We pray for health and safety for each of you as well. With that, I will leave you with a spring picture- change is coming and we will weather this storm.

November Newsletter-Happy Thanksgiving

It’s that time of year when family and friends gather together for the season of Thanksgiving. All of us at the DW Slater Company want to take some time to let you know that we are very thankful for you! Our clients, subscribers, and friends! We are thankful that you choose us for your real estate appraisal services, market updates, questions or concerns. As you gather together in groups big or small, may your time together be special and memorable. If you are cooking for Thanksgiving, scroll to the bottom of the newsletter for a special recipe from our family to yours!

Markets still inching up

Let’s talk about real estate! The markets in North Texas are still up. Although we have been talking about the slowing and certain markets are beginning to flatten, overall markets are still rising. The Texas economy is still very strong. According to the Texas A&M Real Estate Center: The Texas economy gained 297,100 nonagricultural jobs from October 2018 to October 2019, an annual growth rate of 2.4 percent, higher than the nation’s employment growth rate of 1.4 percent. The nongovernment sector added 284,600 jobs, an annual growth rate of 2.7 percent, also more than the nation’s employment growth rate of 1.5 percent in the private sector . Jobs and people continue to migrate to the DFW area. With its recent purchase of Ameritrade, Charles Schwab will be moving its headquarters to Westlake in Tarrant County. To make room for all those relocating to North Texas, PMB Capital Investments with the purchase of 3,400 acres, just announced plans for a residential development of 10,000 homes in Wise County called Rolling V Ranch. This will be one of the largest residential master-planned developments in North Texas.

Median Sales Prices are still slightly up in our main four counties YoY. Inventory & marketing times are up and volume is either down or flat moving to a more balanced market. As noted before, we are still inching up but at a slower pace. Here are the numbers:

OCTOBER 2019
Denton County
$315,000 | +1.6%

Collin County
$335,928 | +1.8%

Dallas County
$245,000 | +2.1%

Tarrant County
$240,000 | +4.3%
OCTOBER 2019
Denton County
29 | +38.1%

Collin County
35 | +52.2%

Dallas County
22 | +46.7%

Tarrant County
18 | +28.6%
OCTOBER 2019
Denton County
3.1 | +19.2%
Collin County
3.5 | +16.7%

Dallas County
3.3 | +26.9%

Tarrant County
2.3 | +9.5%
OCTOBER 2019
Denton County
15,416 | +2.8%

Collin County
16,723 | -0.8%

Dallas County
24,787 | -1.3%

Tarrant County
28,016 | 0.0%

We will continue to watch the real estate markets. Watch for our monthly update in next month’s newsletter.



Congratulations to our own, Shannon Slater and to realtor Whitney Delcourt as they were chosen as Appraiser of the Month and Realtor of the Month from Consumer Home Value. If you have’t checked out Consumer Home Value’s website, please do. They provide a wealth of information to help consumers navitgate the home buying, selling, refinancing or remodeling process. We apprecited the kind words about our company and services from our clients and collegues.




Nana’s Jalepeno Corn Casserole

Nana’s Jalepeno Corn Casserole

Ingredients: 

Two 12 oz cans of whole kernel corn (mostly drained)

One 8 oz pkg of cream cheese

One stick of butter

One & 1/2 whole jalepeno diced ( remove seeds if mild is desired)

Salt & Pepper to taste 

Melt the cheese & butter together

Combine all ingredients in a 9X13 baking pan

Bake at 350 degrees until bubbly  (approximately 10-20 minutes)

 

This recipe is written exactly as it was given.  It will be on our table for Thanksgiving.    Enjoy!

Seasonal Changes- October Newsletter

House in Fall

Last month, I was complaining about how it was still so very hot and I was ready for the cooler fall weather. Well, yesterday we walked around a large 70-acre equine property when it was wet, misty and 45 degrees. I loved it! We are already getting a freeze warning for tonight. That is early in Texas. Some around here say we just skip fall and just go from summer to winter. Some days it certainly feels that way, but I have lived here my whole life and I know that it never stays hot forever and it never stays cold forever. Changes do come, just as they do in the real estate markets.

Real estate markets go and down. They fluctuate. This can really be seen in the interactive charts below when looking at the ups and downs from month to month. To look at a broader picture of our markets check out this chart of the real estate price cycles in the Dallas-Fort Worth Metro area. You can see that we have only had two big downturns. One in the ’80s which coincides with the Savings and Loan Crisis and the second on started in 2007 with the housing crisis.

The markets also change with the seasons. If it feels slower right now, that is because the markets typically do slow month to month in the fall. Looking at our markets of Denton, Collin, Dallas, and Tarrant counties there is a slowing month to month but when compared to the same time last year they are still increasing. The pace of appreciation has slowed but prices are still up YoY. We also wanted to show you the more rapid price appreciation in our more northern and rural markets of Cooke and Grayson counties. See the Cooke and Grayson County charts below. Don’t forget to hover over the charts as they are interactive.

Median Sales Price Trends

SEPTEMBER 2019
Denton County
$311,318 | +3.5%

Collin County
$329,000 | +0.9%

Dallas County
$249,000 | +3.8%

Tarrant County
$240,000 | +4.3%

Median Price Per Square Foot

SEPTEMBER 2019
Denton County
$140 | +1.4%

Collin County
$139 | +1.5%

Dallas County
$140 | +6.1%

Tarrant County
$126 | +5.0%

Median Days on Market

SEPTEMBER 2019
Denton County
34 | +25.9%

Collin County
36 | +20.0%

Dallas County
25 | +38.9%

Tarrant County
21 | +16.7%

Months Supply of Inventory

SEPTEMBER 2019
Denton County
3.0 | -9.1%

Collin County
3.3 | -13.2%

Dallas County
3.4 | +9.7%

Tarrant County
2.4 | -7.7%

Volume- Number of Sales

SEPTEMBER 2019
Denton County
1,225 | +7.2%

Collin County
1,370 | +14.2%

Dallas County
2,037 | +9.0%

Tarrant County
2,270 | +1.8%
 
 

Cooke & Grayson Counties

SEPTEMBER 2019
Cooke County
$210,000 | -1.1%

Grayson County
$185,450 | +7.2%
Cooke and Grayson counties are more rural markets with less population and fewer sales.  For these reason, they do fluctuate more.  There has been a strong increase in the median sales price for both counties within the past three year.  Cooke County sale prices have flattened out.  With the  population growth and price increases  in the North Dallas area, the demand for more affordable houses and the desire for more space have increased the prices in these counties.  
 

Interests have been dropping over the past year and increased slightly last week. With interest rates so low, refinances and housing purchases have been holding strong. Here is a look at the rates over the past year:

Mortgage Rates


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Happy Halloween!

We hope you have plans for a safe and Happy Halloween! As a member of the Pilot Point Chamber of Commerce, the DW Slater Company will be at our local Trunk or Treat. If you are local, stop by and we will give you a treat!

Check out these great reads: 

Does the market really change every seven years? – Sacramento Appraisal Blog

5 Scary Movies that Describe and Appraiser’s Job – Birmingham Appraisal Blog

The Penny… A Classic Example of Cost Not Equaling Value– Cleveland Appraisal Blog

Chick-fil-A and Starbucks Distributor or Move California Headquarters to Texas– CoStar

 

 

September Newsletter-Fall, Lamenting & Markets

Fall Leaves and Trees

Fall is officially here!– But it sure doesn’t yet feel like it in North Texas. It is still so very hot. Today David was headed to his last appraisal appointment. He looked at his device to see the temperature outside felt like 106 degrees. Whew! We are well on our way to having the record for the hottest September in North Texas. Not only is it still hot, but it also does NOT look like the picture above. Everything is still very green. As I type, the cicadas are singing their summer song which has long since lost its appeal. I need a new playlist. It is time for the weather to cool, the cicadas to end their concert and the summer wardrobe to change from summer sandals to boots & sweaters. I love the fall. I love the cooler, crisp weather. I love the fall colors and just that bit of change in the air. But, alas, I cannot rush it. It will eventually make its way here and my summer lamenting will be just a distant memory. Until then, I will keep cranking the A/C, and wait for the change. Speaking of change, do we see any change in our real estate markets?

Our markets started out the summer slowing and were almost flattening last month. However, prices are still rising- just at a much slower pace. In May we discussed the pace moving from a sports car to a tractor. We are maintaining this tractor pace as prices are still up 1-4 % YoY. This month, we are showing the seasonally adjusted charts for our main four counties. This better depicts the slowing pace of appreciation.

Median Sales Price

AUGUST 2019

Denton County
$315,000 | +0.3% 

Collin County
$339,990 | +1.5% 

Dallas County
$248,500 | +3.5% 

Tarrant County
$247,000 | +6.2%

Supply

AUGUST 2019

Denton County
3.2 | -3.0% 

Collin County
3.6 | -5.3% 

Dallas County
3.4 | +13.3% 

Tarrant County
2.5 | -3.8%

Days on Market

AUGUST 2019
 

Denton County
29 | +31.8%

Collin County

34 | +25.9%

Dallas County

20 | +11.1%

Tarrant County

18 | +28.6%

Volume

AUGUST 2019
 

Denton County
1,620 | +9.7%

Collin County

1,615 | +2.9%

Dallas County

2,318 | -3.2%

Tarrant County

2,658 | -3.2%

Although prices are still rising, you can see the signs of slowing as days on the market are longer and supply is increasing. Volume has not declined yet. Mortgage rates continue to remain very low which has kept this train moving. Demand is still high. New construction is trying to keep up with the demand. is typical for the market to slow in the fall. We will be watching these trends for next month.

In the meantime, check out some of these interesting reads from this month:

As always, if you have a question about real estate appraisals or need appraisal services, please feel free to contact us at www.dwslaterco.com

Labor Day Weekend & the Housing Market- August Newsletter

We hope that you have some great plans for labor day weekend. We have had a very busy month of August. We know that you work hard to provide good services or products in your businesses and we hope that you do get to enjoy a little time off from your labor. Whether you are making a last-minute trip or staying home for some downtime, make it a great weekend!

Our thoughts are with you that are in the path of Hurricane Dorian our prayers for safety from this unpredictable storm.

The summer months have ended up strong but flat. Sale volume is up. Sale price appreciation year to year is flat. Days are on the market are still increasing and supplies are up in Dallas and flat in the other markets.

Here’s a current look at the market trends- don’t forget to hover over the charts for more information.

Median Sales Price

JULY 2019
 

Denton County
$322,950 | +1.0%

Collin County
$343,000 | -0.2%

Dallas County
$249,700 | +1.9%

Tarrant County
$247,500 | +3.4%

Months of Supply

JULY 2019
 

Denton County
3.3 | +3.1%

Collin County
3.7 | -2.6%

Dallas County
3.5 | +25.0%

Tarrant County
2.5 | 0.0%

Days on the Market

JULY 2019
 

Denton County
25 | +31.6%

Collin County
32 | +60.0%

Dallas County
18 | +38.5%

Tarrant County
14 | +27.3%

Volume

JULY 2019
 

Denton County
1,660 | +13.6%

Collin County
1,736 | +2.5%

Dallas County
2,387 | +5.6%

Tarrant County
2,785 | -0.8%

Grayson & Cooke Counties

We wanted to also share an update on some of our more rural markets. We appraise in Cooke and Grayson counties. We have been seeing sale prices rising in these more rural, less dense markets. Some of this is due to affordability. As the prices in the North Texas market have been increasing, many are searching further north to find more affordable homes.

JULY 2019
 

Grayson County
$206,500 | +11.9%

Cooke County
$205,000 | -1.7%

What’s up with Mortgage Rates?

Mortgage rates are still at historically record lows. Per Freddie Mac, the current 30 year fixed rate is 3.58%. Although rates are low and the economy strong, we are not having the housing boom you might think. We are seeing boom in refinances but supply, affordability and the cost of construction are keeping a damper on housing.

Again, we wish you a wonderful Labor Day weekend and if you have any questions about real estate appraisals or services don’t hesitate to contact us at www.dwslaterco.com.

What is a Barndominium?

red barndominium

Do you watch Fixer Upper? Did you see the episode of the Barndominium? I truly believe the term “barndominium” was influenced by this episode of Fixer Upper. This alternative style of home is becoming more and more popular in the past few years. Basically, a barndominium is a style of home which is typically made of metal construction similar to barns. Sometimes they are attached to barns or workshops similar to the photo above or they could stand alone. These are unique homes and offer a certain lifestyle for those that love living in the country and the country lifestyle. We have seen them as barns that have been converted into living space or built designed as living space. Most of the time they are attached to barns and stall spaces.

Although the exterior of many barndominiums look like barns the interior are typically well designed, insulated and can have average to very high grade custom finishes. Here is the interior of a finished out interior barndominium:

Finished out interior of a barndominium

This style of home has actually been around a while but we have seen a recent increase in the number of barndominiums as well as an increase in prices. I agree with this article in realtor.com that this is a good term used to describe them. We used to call them “metal constructed homes” or “barnstyle homes”. Our local MLS (multi-listing service) added the term “barndominium” as a style of home in 2016 so it is now easier to search for this style of home. Prior to 2016, it was more difficult to track them as they were listed in the MLS as various types of alternative construction. You can see this chart how within the past 2 and 1/2 years in our markets barndominiums are appreciating:

Barndominiums are a Lifestyle Choice

We have seen a rise in the number of barndominiums we have appraised as well as sales in our North Texas markets. We believe that this is a great choice for those that prefer a more country lifestyle. When the living space is attached to your barn stalls, wash rooms, and tack rooms, it is convenient to go and tend to your animals within your space. Once, David, was appraising a barndominium and the new owners had just arrived from out of town. As they were in the kitchen and David was observing the interior, they had forgotten to shut on the doors and this beautiful horse strolled in and joined them all in the kitchen. They calmly led the horse back out the door into his stall but it illustrates the lifestyle of a barndominium. I liken it to those that enjoy the sights, smells, and sounds of the city may prefer living in a high rise, those that prefer the sights, smells and sounds of the country may prefer living in a barndominium.

Sometimes the barndominium is a converted space in the barn and used as a living area until the future main house is built. Sometimes the barndominium is designed as guest quarters or for ranch hands and other times they are the main living area and designed as such from the beginning.

Appraising Barndominiums

Appraising barndominiums can be tricky as they are a more unique style of home. As more barndos (how many shorten the term), become available on the market, they become a bit less complex. Some of the things that appraisers will look for:

Main Space or Extra Space– We have appraised some properties where the barndominium is a guest house or perhaps living quarters for a ranch hand. If the living space is not a part of the main living area, it will not be included in the main living area but as an additional feature. You can read more about living area here: What Counts as Living Area in an Appraisal?

Quality– The quality of construction will be considered in the appraisal as not all barndominiums are of the same quality. Just as some custom homes have higher grade finishes and features, the same can be found in barndominiums. It is important to compare barndominiums with similar quality of construction if possible.

Lot Size– Barndominiums are typically on acreage and the size of the acreage will have an impact on the appraisal. Ideally, if an appraiser is appraising a 2,500 sq ft barndominium on 10 acres, they would love to find comparables of similar sized sq ft on as close 10 acres as possible.

Location– as always in real estate, location is the biggest factor influencing value. A barndominium located next to a river will have a much different value than a barndominium located next to a cement plant. In our markets, there are entire subdivisions of barndominiums on 5-10 acre lots. These subdivisions are designed for an equestrian lifestyle and are located in areas where the soil is of sandy loam and most suitable horses. The locations with sandy soil have many more equine properties as well as equine hospitals, supply stores and services available. Barndominiums in these locations sell for higher prices than those located outside the more suitable soil.

Additional Buildings & Features– Appraisers will also take into consideration additional improvements to a property such as workshops, mulitple barns, arenas, fencing, etc. All of the features are to be taken into consideration for contributory values.

Barndominium converted from original barn

What do you think of Barndominiums? Have I left anything out? Would this be a style of home for you?

If you have any questions about appraising barndominiums or other real estate feel free to reach out to us at www.dwslaterco.com

The Problems with the Price Per Square Foot Method

Do you know the price per square foot method for determining the value of a property? Do you use it? This is a topic that has been written and discussed much and for good reason. Real estate agents, buyers, seller’s, lenders, or investors all like an easy way to determine the value of a home. Many will use the price per square foot method.

Example: You know that a property which is 2,500 sq ft in size sold for $350,000. You take the price of the home, divide it by 2,500 and ………..(drum roll)………- the price per square foot is $140! Now, your house is 3,500 sq ft, so using the price per square foot method, you multiply 3,500 x 140 and………..(another drum roll)…… your house is $490,000! Wow! Wasn’t that easy? Well, it might be easy but there are many problems that can occur using this method for determining value. It is my desire to share some of the reasons why this might not be the best method for many, many properties.

Many Factors Contribute to Value

One of the problems with using the price per square foot method is that it does not consider any of the other factors that contribute to the value of a home. When you use the price per square foot method, you are only considering the size of the home and nothing else. You could over price or under price a home looking at only the square footage. Here are some of the other factors that contribute to the value of a property and should be considered when determining value:

  • Location – the location of a property can have either a positive or negative impact on the value of a home. A property located with a beautiful view of a lake will have more value than a property located with a view of the local trash dump. A property located in a gated private community with access to a community pool, clubhouse, tennis courts, and a private lake will have more value than one that is not located in such a development. Would you love drinking your coffee and listening to the birds with the view below or next to the noisy highway that drowns out the sounds of the birds each morning?
This back porch view would contribute to overall the value of the property.
  • Amenities- There are so many additional features or amenities that also contribute to the overall value of a property. Some common amenities in our markets are swimming pools, pool houses, workshops, guest houses, barns, or party rooms. For lake homes, boat docks, lifts, and boathouses give added value. When you look at only the price per square foot, you are not considering any of these amenities.
  • Condition-One very important factor that impacts value is the condition of a home. If your neighbor’s house sold for $225,000 and it is the same size, same age and located next door then your house should be worth $225,000 right? Well, it would except that before their house sold, it had a new roof, all of the flooring replaced, the kitchens and bathrooms updated with new fixtures, and the interior and exterior was repainted. Your house still has the 1970’s avocado green appliances, shag carpet, popcorn ceilings, and original roof. The conditions of the two homes are not equal. Using the price per square foot method does not consider the condition of a home.
  • Quality of Construction– Similar to the condition of a home, the quality of the construction is also a factor when determining the value of a home. Understandably, a home with a much superior quality of construction will sell for more than one that is less. Real estate appraisers look for the quality of the construction in such things as the flooring, custom cabinets, high grade or commercial grade appliances, built-ins, custom trim, and finishes. Price per square foot does not consider the quality of construction.
  • Age-Related to the condition of a home is the age. It is best to compare homes that are of similar age. One of the things that appraisers determine in the appraisal process is the economic life of a property. At some point, a property will reach the end of its economic life, most of the contributory value of a property will be in the land alone. At this time, the highest and best use will be for it to be demolished. That is not to say that all older homes have reached the end of their economic life. We see many that are remodeled, preserved and well maintained. The point is that when finding homes that are comparable, having homes of similar age is important. Price per square foot does not consider the age of a home.

Law of Diminishing Returns

Another reason that price per square foot will give you inaccurate and false results has to do with the “Law of Diminishing Returns”. The law of diminishing returns is defined as” the premise that additional expenditures beyond a certain point ( the point of decreasing returns) will not yield a return commensurate with the additional investment.”- The Dictionary of Real Estate Appraisal 4th Edition.

Let’s go with the example I began with and that the house that sold for $350,000 is located right next door to my house. Both are in the same location, have the same view, are the same age, are in the same condition, have the same quality of construction and amenities. All is the same except for the size, so the price per square foot method should be great, right? Well, unfortunately since my house is 3,500 sq ft and the house next door is 2,500 square feet. That is a very large difference in size. The law of diminishing returns would factor in here and my larger house is going to sell for a smaller price per square foot than my neighbor’s house.

Do you ever shop at Sam’s Club, Costco? The price per unit goes down the more that you buy in bulk. Back when we had all of our 7 kids at home, it was so beneficial for us to buy in bulk as the price per ounce or price per pound was less. I mean we went through a gallon of milk and a loaf of bread each day! One of the best analogies that many of you can relate to is from appraiser Ryan Lundquist as he used the analogy for Starbucks and the price per square foot–the price per ounce differences in the Tall, Venti and Grande at Starbucks diminish as the size increases. Same principle.

Price Per Square Foot and Trends

One of the reasons, I decided to write this post is because I had a reader ask me about the price per square foot trends that we publish in our monthly newsletter. Our company publishes a monthly newsletter with market updates and trends. One of the metrics that we look at is the price per square foot trend. (if you are interested in our monthly newsletter you can sign up at our website or on the sidebar of this blog) Someone wrote to me to ask about if his property had a horse barn and was on five acres would the price per square foot trends we reported apply? The answer, of course, was no.

The trends are a broad look at larger market areas and not his specific smaller market area. Plus of course, it didn’t consider his larger lot size and amenities. The trends are really just a metric to look at to see what the overall market is doing. It is one of the many things that we look at. The next time you read a headline about prices up 25% or homes selling at $125, please do not use those numbers for your own home. Each property is unique and will require an expert in valuation to help you in knowing what your home is worth.

Here is a trends chart from our newsletter-(Hover over it and you can see the numbers for each month)

So, I hope you find this helpful. Know that using the price per square foot method can get you inaccurate results. I have only shared some of the problems that would change the result of the price per square foot method. Unless a home is similar in every way, chances are there are factors that will skew the result of price per square foot. What did I leave out? Do you use this method? If you have any questions about this, appraising or real estate appraisals please contact us at www.dwslaterco.com

Helpful Resources:

Starbucks and the price per square foot – Ryan Lundquist, Appraiser from the Sacramento Appraisal Blog

Why price per square foot can be an agent’s worst enemy when pricing a home- Tom Horn, Appraiser from the Birmingham Appraisal Blog

Price Per Square Foot is a Poor Value Indicator– Bill Gassett , Realtor from the Maximum Real Estate Exposure Blog

January Newsletter-2019 Year in Review

Photo by David McBee from Pexels

“And now we welcome the new year. Full of things that have never been.”

Rainer Maria Rilke

We hope that your 2020 is off to a great start! As we enter another year, we wanted to look back at 2019 and review the year. We went a little more in-depth with some of the statistical data and have some different graphs for you. This year we continued to see population growth as inventories are beginning to increase. Some interesting stats of note:

  1. Tarrant County had the largest number of sales in 2019
  2. All four counties show slight price increases in 2019
  3. All four counties have increased supply
  4. All four counties have bank-owned (foreclosure) of less than 1%.

 

Here are the numbers and stats for 2019: 

 

 

 

Overall the markets are flattening with slight increases for the year.  We are not in a down cycle. As the Texas economy remains strong and population growth continues we do not anticipate a market decline.  That said, unforeseen things can impact the market, thus we will continue to provide you with monthly updates and information. 

**Please note that these statistics are general market trends and are not considered to be used to determine the value of your specific home**

Please let us know if there is are other metrics or information you would like us to cover for North Texas.

How to Build Equity in Your Home

Want to know how to build equity in your home? Lexi Klinkenberg with Redfin put together these answers from real estate appraisers. We were honored to be featured in this article.

How to Build Equity in Your Home

Published on: January 21, 2020 – By Lexi Klinkenberg

Building home equity is one of the many financial benefits to homeownership, but sometimes it’s hard to know where to start. Increasing your property value through renovations or home additions, and paying off your mortgage, seem like the most straightforward ways to build equity. But there are also some factors that determine what your house is worth that are out of your control, like the location and popularity of the particular housing market. We gathered tips from experts in the field to share what they find to be the most effective ways to build equity in your home.  

Spurgeon Appraisals: Thinking about putting in a gazebo? A saltwater pool? Custom features may not always contribute to value, because they may not be widely accepted by your market.  Spend your money where every homebuyer looks, the kitchen, bathroom, roof, and repairs. The more you stray from the norm the less likely you’ll see a return on your investment.   

OlaesSmith Appraisals: A good way to build equity in your home is to see if your house is being used at its highest and best use. Being able to add additional square footage to your home to maximize your floor to area ratio allows you to use larger home sales when an appraisal is done on your home, which in turn will add more equity to your home versus its original smaller footprint. 

John Tsiaousis, Chicagoland Appraisals: Start by understanding what is happening in your market for the type of property you have. Let’s take a 2-flat in Chicago’s Logan Square for example from a real estate appraiser’s perspective.  If you were to automatically remodel the kitchens and bathrooms in both units in a very short time you’d find yourself having questions as to the value. Most 2-flats in Chicago’s Logan Square are not being fully remodeled, rather the 1st-floor unit is being duplexed with the basement and that is being fully remodeled to current tastes and the 2nd-floor unit is being spruced up with paint and minor updates.

Alex Argianas, Argianas and Associates: Your first priority, if you have been putting off, should be superstructure & mechanicals like the roof, HVAC system, electrical and plumbing. What’s more, a proper appraisal will identify and should apply the costs associated with these upgrades in the appraisal of the home. A new kitchen is great, but if the roof leaks or you can’t heat it, you’re going to have some unhappy home buyers. 

American Realty Appraisals: While it’s important to increase the energy efficiency of the home which will improve comfort and lower utility bills, the market doesn’t react to these critical factors that they don’t see, like they should. One thing homeowners can do which may not necessarily increase the equity in the home on a refinance, but lowering your taxes through tax appeal can increase the purchasing power of a potential buyer and thus increase buyers’ bids to purchase the property…..and that is extra equity for the homeowner.

Gynell Vestal, Consumer Home Value: Build a strong relationship with a local real estate appraiser. They should obtain an appraisal every few years to keep current with their home value and property expectations for their market. An appraiser can advise them on trends and characteristics important in their micro-market and the cost-to-value relationship of improvements remodels or upgrades being considered. This way homeowners spend their money on improvements that will maximize returns and are steered away from potential over-improvements. 

Matthew Frentheway, Aspen Appraisal Group: Typically, the amount people spend in finishing a basement will only yield about half as much in equity. So it’s not a good idea to finish one if you expect to get immediate equity back out if they sell or get a loan. It is better to do it for the use of the area, and wait for the market to increase to get your money back out.

Sun Point Appraisals Inc.: The one thing on a financial lending appraisal report and only one thing regarding upgrades is a box on page 1 of the report.  This box asks the appraiser to indicate if the kitchen and/or bathrooms have been updated within the prior 15 years. Once this box is checked “yes” the Appraiser now has told the Reader of the report this home is updated.  Now when the Appraiser compares this home (the subject of the appraisal) to other recently sold homes they will need to analyze how this updated kitchen and/or bathrooms have impacted the overall value of the home. 

Appraisal Partners: One way to help gain equity is to help sell your neighbor’s home. As an agent, I have run into scenarios where neighbors are not very accommodating when it comes to the sale of their neighbor’s home. They take down directional arrows, they steal yard signs and leave cars parked in the street. If you’re directly next to the home for sale, clean up your backyard. I have had a few sales where the property had trouble selling because the neighboring backyard was in disarray. As an appraiser, we are looking for comparable sales to form our value opinions. If your neighbor’s home sold low, likey when you go to refinance, we are going to use that sale as a comparable for determining value. So if you see your neighbor trying to sell their home, help them out. Spread the word, be accommodating and help the real estate agent.  

DW Slater Company: Home improvements can add equity to your home, however, we recommend checking with a local market expert to find out which improvements are showing the best return on investment in your area.  Not all markets are the same. Kitchen remodels may add greater value in some markets where outdoor living spaces will add more value in another market. Check with a local real estate appraiser. 

Jamie Owen, Aspen Appraisal Services: If you have a walk-up attic with a high enough ceiling height, a fairly simple way to add equity is by finishing and heating that area. It’s a fairly simple way of adding gross living area and it’s much less expensive than most traditional additions. If a person wants to do so, I recommend checking with their municipality to make sure that it is legal to do so and that the area can be considered gross living area when completed. But this is a relatively easy way to add equity.

Brian KirkpatrickDFW Appraisals: Equity is in residential real estate is typically built by identifying items that the current market reflects.  In the day and age of real estate television shows, Pinterest, and social media, one can visibly see what trends are current with fashion and styling.  Updating components of your home to reflect popular culture is the best way to build equity in your property. Components such as roof, HVAC system, and water heater are considered short-lived items; meaning, their economic life span is shorter than that of the real estate. Always remember that cost is what you pay but value is what you get.

Just Appraisals: Design trends come and go, but a great way to add long-lasting value is by adding an accessory dwelling unit. The extra living space and potential income will continue to add value for as long as you own the property. 

Ryan Lundquist, Sacramento Appraisal Blog: This might sound strange, but one of the best ways to build equity is to do absolutely nothing. During an increasing market, a homeowner has an incredible opportunity to sit back and build wealth by simply riding the wave of growth. In fact, many owners have done this over the past eight years and they have hundreds of thousands of dollars in equity without having lifted a finger. Yes, kitchen remodels and other improvements can surely make a big difference for a home’s value, but what the market is doing can actually mean way more.

Master Appraisal Services: If you want to build equity in your home to increase the value, the pat answer is almost always updating kitchens and bathrooms or add square footage. Just updating is not necessarily maximizing the potential. It is also important to make sure that the updates are current to today’s demands and expectations of the market. One way to see what is most current is to go tour the model homes in new developments for ideas.

Originally Published on Redfin

Happy New Year & December Newsletter

Happy New Year Fireworks
Happy New Year!

Happy New Year!! We hope that you had a wonderful holiday season and made great memories.  As 2019 ends,  we wanted to say thank you for your support and confidence in us for your appraisal services.   This year was a great year and we were honored that you chose us for your residential and commercial appraisal needs.  We had a great year of residential services including, single-family homes, waterfront properties, new construction, barndominums, condominiums, and high-end luxury homes.  We also enjoyed providing commercial services for warehouses, commercial land, office/retail, and equine facilities.  We appreciated the continued relationship with many of our clients and the new clients of 2019.  We look forward to continuing to provide you with reliable appraisal services in the year 2020.

We have been experiencing some technical issues with our blog and with the very busy end of year work we have not been able to provide the December Newsletter earlier.  I think that I have now fixed some of the issues in WordPress.  It is the last day of 2019 but here it is!

Real estate markets are still inching up ever so slowly.  Most metrics are trending upward.  Median Sales Price – up slightly; Marketing Times- up; Supply-Up; Volume- Flat.  The charts below represent the month of November compared to the same time last year and have been seasonally adjusted.   Here are the charts:

Median Sales Price Trends

NOVEMBER 2019
Denton County

$315,000 | +1.6%

Collin County
$337,000 | +2.1%

Dallas County
$245,500 | +2.3%

Tarrant County
$240,000 | +4.3%

 Days on Market

NOVEMBER 2019
Denton County

30 | +42.9%

Collin County
35 | +45.8%

Dallas County
22 | +46.7%

Tarrant County
19 | +35.7%

Months of Supply

NOVEMBER 2019
Denton County

3.1 | +14.8%

Collin County
3.4 | +9.7%

Dallas County
3.3 | +26.9%

Tarrant County
2.3 | +9.5%

Volume

NOVEMBER 2019
Denton County

15,486 | +3.9%

Collin County
16,695 | 0.0%

Dallas County
24,827 | -0.1%

Tarrant County
28,117 | +0.7%
These charts have been seasonally adjusted.  Take a look at the monthly chart that shows more of the seasonal trends.   In the past four years, the market prices have consistently peaked in June.

In next month’s newsletter, we will be able to do a full recap of 2019 as December’s numbers will be in.  We try to publish the newsletter after 2 weeks into the month in order to allow time for all of the data to be collected.

This marks our 4th year of sending out a monthly newsletter.  We hope that you enjoy it and get something out of it each month.  Please let us know if there is something you would like to change or add to the newsletter to make it an even better experience. 

 

Due to some technical difficulties we are experiencing on our site, I was not able to upload the interactive charts.  Once the issues are fixed I will update this newsletter so that the charts are interactive.

 

 

Please look forward to our January Newsletter which will have all of the end of year data and analysis available. 

 

Have a safe and Happy New Year!
David & Shannon Slater

Here’s to a great 2020!

Geckos & Summer Housing- July Newsletter

gecko

It’s that time of year when the heat can really begin to bother you. Many parts of the country have been experiencing a heatwave. I am so very thankful to Willis Carrier, inventor of the modern-day air conditioner. I have lived in Texas my entire life but could not do it without AC! That being said, last week our AC stopped working. Yikes! Not when the heat index is over 100 degrees! Fortunately, the repairman was able to come quickly and get it up and running again. What was the culprit? What caused my AC to stop cooling? A gecko! I guess because of the more than usual rainfall we’ve had, there has been an abundance of geckos at our place. Four or five every night on our porch. Evidently, three of them decided to crawl into our outside unit and one of them crawled into a space that shorted out the system as well as himself. In fact, there were three gecko casualties found in our unit.

Just as that gecko caused problems with our AC, there are factors causing the North Texas markets to shift. The sizzling markets of rapid price appreciation, low supply and short marketing times are cooling with supply and marketing times on the rise.

What is impacting our markets? Mortgage rates are certainly not causing them to slow. Mortgage rates decreased all of throughout the month of June. But what about affordability? The demand in our area brought about by immense population growth has caused prices to rise at a pace faster than the wages have risen. A recent study reveals that only around half of Americans can afford an entry-level home. Affordability inTexas has historically been greater than the US. However, the gap has been closing in. Affordability is becoming more of an issue in many areas of Texas and especially in the DFW metroplex. Homes are beginning to stay on the market a bit longer, which is increasing the supply of homes available for buyers and in turn in bringing prices down. Sellers can no longer price to the sky and expect any and all to be able to afford it.

Today when I look at a snap snot of this area, the largest number is not the number of new listings or pendings but the number of price decreases. This means that sellers are having to come down a bit to meet the buyer. The slowing down of our markets do not indicate a crash but perhaps a more balanced market. Prices will need to match what buyers can afford.

So in our markets, median sales prices have increased nominally or are flat. Supply has increased as well as marketing times. Volume has decreased. All signs of a cooling market. Is affordability the “gecko” that is slowing down the markets? Take a look at this month’s numbers:

JUNE 2019
Denton County
$325,000 | 0.0%

Collin County
$355,000 | +2.4%

Dallas County
$269,900 | +5.6%

Tarrant County
$250,000 | +4.2%
JUNE 2019
Denton County
3.4 | +13.3%

Collin County
3.9 | +8.3%

Dallas County
3.4 | +21.4%

Tarrant County
2.5 | +4.2%
JUNE 2019
Denton County
24 | +60.0%

Collin County
28 | +75.0%

Dallas County
16 | +33.3%

Tarrant County
13 | +30.0%
JUNE 2019
Denton County
1,461 | -8.2%

Collin County
1,688 | -2.8%

Dallas County
2,203 | -12.8%

Tarrant County
2,608 | -7.6%

Feel free to click on all of the charts and get the numbers. You can see the changes that are occurring. They are not big, they are not drastic but they are enough to dampen the blazing markets that we have experienced the last five years. Of note, the Texas economy is very strong. Foreclosure rates are very minimal. People are staying in their homes longer than ever. We continue to grow as more jobs, homes, and people are headed our way. So, just maybe there is no “gecko” shorting out the system and making it unfunctional. Perhaps, home prices need to slow down and let wages catch up.

So I hope that your geckos are not shorting out your AC units and that you are able to find some great ways to cool off in the summer heat. In the meantime, if you have questions about our local real estate markets or appraisal services- reach out to us at www.dwslaterco.com